IL&FS Investment Managers Limited (IIML) is facing regulatory action from stock exchanges due to a delay in submitting its consolidated financial results for the quarter ended June 30, 2025. The company has cited challenges with its subsidiary, Andhra Pradesh Urban Infrastructure Asset Management Limited (APUIAML), as the primary reason for the delay.

Key Developments

1. Missed Deadline: IIML failed to submit its consolidated financial results by the August 14, 2025 deadline, as required under Regulation 33 of SEBI's Listing Obligations and Disclosure Requirements (LODR).

2. Reason for Delay: The company attributed the delay to non-receipt of board-approved financial results from APUIAML. The subsidiary was unable to convene its board meeting due to the unavailability of government-nominated directors.

3. Regulatory Consequences:

   • The National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) have imposed fines totaling Rs. 2,65,500.00 (including GST).
   • The exchanges have threatened to freeze the promoter shareholdings if compliance is not achieved and fines are not paid within a specified timeframe.

Company's Response

IIML has taken several steps to address the situation:

1. Continuous Follow-ups: The company engaged in persistent follow-ups with APUIAML from July to October 2025, including escalations to senior management.

2. Regulatory Disclosures: IIML made timely disclosures to the stock exchanges regarding the reasons for the delay.

3. Board Review: On November 13, 2025, IIML's board reviewed the situation and endorsed the company's actions, noting that the delay was beyond the company's control.

4. Requests to Exchanges: IIML has requested the stock exchanges not to freeze promoter shareholdings and to waive the imposed fines, citing the impossibility of performance due to circumstances beyond its control.

Current Status

As of November 18, 2025:

1. IIML has received the necessary financial results from APUIAML.
2. The company has completed the consolidation process.
3. IIML is in the process of submitting the consolidated financial results to the stock exchanges.

Implications

This incident highlights the challenges faced by companies with government-linked subsidiaries and the potential regulatory consequences of delayed financial reporting. It also underscores the importance of robust internal processes and communication channels between parent companies and their subsidiaries to ensure timely compliance with regulatory requirements.

As the situation unfolds, investors and market participants will be closely watching how the stock exchanges respond to IIML's explanations and requests for waiver of penalties.

IL&FS Investment Managers Limited (IIML) has reported mixed financial results for the quarters ended June and September 2025, while also declaring an interim dividend amidst ongoing investigations and operational challenges.

Financial Performance

For the quarter ended September 30, 2025, IIML reported:

The company's performance showed a significant improvement in Q2 FY2026, primarily driven by a substantial increase in other income, which includes dividend income of ₹2,873.25 lakhs.

Interim Dividend

Despite the challenging environment, IIML has declared an interim dividend of ₹0.50 per equity share, with the record date set for November 21, 2025.

Operational Challenges

IIML faces significant operational challenges:

1. The terms of most existing funds managed or advised by the company and its subsidiaries are nearing their extended end dates.
2. This has resulted in a substantial reduction in fee revenue, with the company generating minimal fee income during the recent quarters.
3. The company's future income is expected to be primarily from the remaining funds under management and project revenues.

Ongoing SFIO Investigation

The company continues to be under investigation by the Serious Fraud Investigation Office (SFIO) of the Ministry of Corporate Affairs. This investigation, initiated in October 2018, involves IIML's parent company, Infrastructure Leasing & Financial Services Limited (IL&FS), and its subsidiaries.

Going Concern and Future Outlook

Despite these challenges, management believes that:

1. Future income from remaining funds and liquid assets held as of September 30, 2025, will be sufficient to meet the company's obligations over the next 12 months.
2. The use of the 'going concern' assumption in preparing financial results remains appropriate.

Resolution Plan and Potential Sale

The IL&FS Board is working on a resolution plan that involves the sale of assets and businesses. In December 2023, IL&FS invited expressions of interest for the sale of its entire stake in IIML. The company reports that several prospective bidders have shown interest, and the process is ongoing.

Consolidated Results Delay

IIML was unable to adopt the Unaudited Consolidated Financial Results for the quarter and half-year ended September 30, 2025. This delay is due to one of its subsidiaries, Andhra Pradesh Urban Infrastructure Asset Management Limited (APUIAML), not finalizing and submitting its Limited Review Results for the period.

Investors and stakeholders should closely monitor the ongoing SFIO investigation and the potential sale of IL&FS's stake in IIML, as these factors may significantly impact the company's future operations and financial performance.